Annotated GST Act – Chapter 2 – Part 2-2 – Division 11

Eastwin Trade Pty Ltd and Commissioner of Taxation [2017] AATA 140 – whether the taxpayer was entitled to input tax credits for the purchase of “scrap gold” from suppliers – whether the asserted purchases of gold were real transactions and if so, what was purchased and from who – the Tribunal observing that reality was not sufficiently established by the invoices themselves or by the taxpayer’s accounting records.

VGGL and Commissioner of Taxation [2013] AATA 867– the applicant was not entitled to input tax credits for the following expenses incurred purportedly incurred in carrying on a property development business: Amounts incurred in respect of the construction of a townhouse, where the Contract of Sale expressly indicated that the sale was not a taxable supply and was not sold in the course or furtherance of an enterprise carried on by the applicant; Legal fees in respect of proceedings brought by a shareholder of a company of which the applicant was also a shareholder; Other expenses purportedly incurred in the course of the property development enterprise which could not be substantiated (Case analysis)

Professional Admin Service Centres Pty Ltd v Commissioner of Taxation [2013] FCA 1123 – the applicant was not entitled to input tax credits for the payment of legal fees of third party pursuant to a litigation funding arrangement – at [53]: the UK decision in Redrow cannot be regarded as authority for the general proposition that a person who enters into a reimbursement obligation makes an acquisition of the supply, the cost of which is to be reimbursed

Conor Robinson v Revenue and Customs [2017] UKUT 383 – assessment in respect of disallowed input tax-whether FTT erred in finding HMRC entitled to disallow right to deduct in the absence of evidence of receipt by the appellant of a taxable supply -no- appeal dismissed

Eastern Atlantic Helicopters Ltd v Revenue and Customs [2016] UKFTT 277 – Input tax – Sale of helicopter held in name of US entity on trust for civil aviation regulatory purposes to UK appellant – identity of supplier?– whether supply by UK company which provided invoice or by US legal owner trustee – supplier was the UK company which held beneficial interest – appeal allowed – whether invoice invalid in any case because it referred to previous company name – HMRC to consider exercise of discretion in relation to “other evidence”

Danesmoor Ltd v Revenue & Customs [2015] UKFTT 294 – input tax-appellant contracted and paid for services of solicitors and accountants-advice given mainly to others -did appellant obtain anything at all to be used for the purposes of its business-no-appeal dismissed

Finds You Ltd v Revenue & Customs [2015] UKFTT 91 – input tax – supply of services in relation to the raising of equity finance by the appellant – Airtours Holidays Transport Limited v Commissioner for HM Revenue & Customs considered – whether the appellant established that it was the recipient of the services – no – appeal dismissed

Langran v Revenue & Customs [2009] UKVAT V20969 – INPUT TAX – Appellant incurred legal expenses in respect of a dispute with his former partners – Appellant claimed VAT repayment on those supplies – were the supplies made to him in his capacity as a partner for the purposes of the partnership business – no – supplies made to him in a personal capacity – Appeal dismissed

Customs and Excise v Redrow Group plc [1999] UKHL 4; [1999] 1 WLR 408 – tripartite agreement – whether the operator of a sales incentive scheme was entitled to deduct input tax in respect of services by estate agents on the basis that the services were supplied to the customers who purchased the houses but also to the operator for the purposes of its business

Rio Tinto Services Ltd v Commissioner of Taxation [2015] FCA 94 – the taxpayer was not entitled to input tax credits in respect of acquisitions made in the course of leasing remote housing accommodation to its workforce in the Pilbara mining region of Western Australia because those acquisitions related to the making of supplies that would be input taxed; at [33]: the words “relates to” in s 11-15(2)(a) simply denote that there must be a relationship or connection between an acquisition and the making of input taxed supplies – What must be established to come within the section is a material or sufficient relationship but the existence of such a relationship is not made to depend on a “purpose” test. A finding that the provision of accommodation was an essential and necessary incident of the applicant carrying on its mining operations would not mean that s 11-15(2)(a) was not engaged.

AXA Asia Pacific Holdings Limited v Commissioner of Taxation [2008] FCA 1834 – applicant not entitled to credits for acquisitions (general management expenses) as the acquisitions related to the making of supplies that would be input taxed within the meaning of s 11-15(2)(a) – at [38]: s 11-15(2)(a) is a “blocking provision” and if an an entity acquires a thing in carrying on its enterprise, it does not acquire it for a creditable purpose to the extent that, relevantly, the acquisition relates to making supplies that would be input taxed

HP Mercantile Pty Limited v Commissioner of Taxation [2005] FCAFC 126 – acquisitions relating to purchase of debts were not for a creditable purpose as the acquisitions related to making supplies that would be input taxed – at [35]: s 11-15(2)(a) requires there to be “real” and substantial relationship between the acquisition and the making of supplies, not a trivial relationship – at [46]: the language of s 11-15(2)(a) suggests that it is not intended that there be a tracing between the acquisition and an actual supply – at [52]: there is no requirement that the supplies be made after the acquisition, all that is required is a relationship between the acquisition and the making of supplies that, if any are made, would be input taxed

Revenue and Customs v Frank A Smart & Son Ltd [2016] UKUT 121 – input tax – purchase of Single Farm Payment Entitlement units – whether used or to be used for the purposes of the taxable person’s economic activity – whether direct and immediate link with the taxable person’s business – yes – appeal refused

Volkswagen Financial Services (UK) Limited v Revenue and Customs [2015] EWCA Civ 832 – taxpayer sold motor vehicles under hire purchase arrangements – whether input tax in respect of general overheads are all attributable to the exempt supplies of finance or whether partly attributable to the taxable supply of motor vehicles and partly attributable to the supply of finance – rejected HMRC contention that input tax on overheads can only be deducted where the cost of the overheads is included in and recovered as part of the price charged for the taxable output – whether a special method of apportionment allowing a 50% recovery rate was fair and reasonable – appeal to Upper Tribunal – [2012] UKUT 394 – first instance [2011] UKFTT 556

Bedale Golf Club Ltd v Revenue & Customs [2015] UKFTT 446 – golf club – refurbishment of chairs and replacement curtains in a clubhouse bar and lounge area – maintenance and repair of a lift – whether used or to be used exclusively by the club in making taxable supplies – direct and immediate link to taxable supplies and exempt supplies – appeal dismissed

Lincoln Assurance Ltd v Revenue & Customs [2008] UKVAT V20619 – VALUE ADDED TAX – input tax – Appellant made exempt supplies of finance (the sale of securities) outside the member states with a right of recovery of input tax (specified supplies) as well as taxable and exempt supplies – no goods or services supplied to the Appellant were used exclusively in making specified supplies – whether the input tax on goods or services used in part in making specified supplies was to be attributed to specified supplies by reference to the proportion which the value of the specified supplies bore to the value of total supplies – yes – appeal allowed

Wadham College Oxford v Revenue & Customs [2007] UKVAT V20233 – Partial Exemption – subsequent claim for input tax not claimed under operation of special method based on the “CVCP Guidelines” for universities and colleges – special method allowed or approved, not directed – determination of nature of special method – if the method did not provide recovery in respect of all relevant input tax how to fill gaps – with standard method or method approved for later periods – jurisdiction of tribunal in relation to a special method which had been allowed or approved – could the taxpayer appeal?

BLP Group plc v Customs and Excise [1995] STSC 424 – whether BLP could deduct input tax which it had incurred on professional services in connection with the sale of shares in a German subsidiary – the share sale was an exempt transaction but the deduction of input tax was claimed on the basis that the purpose of the sale was to raise money to pay off debts that had arisen as a result of various taxable transactions – claim failed because the only direct and immediate link which the inputs had was to the exempt sale of shares

Canada

University of Calgary v The Queen 2015 TCC 321 – whether the taxpayer was entitled to claim input tax credits for indirect costs iunder a methodology put forward by the taxpayer based on land area and purported actual use – whether methodology fair and reasonable

Andrei 95 Holdings Ltd v The Queen 2015 TCC 224 – whether the taxpayer was entitled to input tax credits in respect of legal fees – whether legal fees incurred in the course of any commercial activity carried on by the taxpayer – no – also the legal fees related to the separation of business interests by way of a share buyout (an exempt transaction)

Mac’s Convenience Stores Inc v The Queen [2012] TCC 393 – whether service charge received for allowing the Automated Banking Machines of third party bank on the appellant’s convenience stores consideration for an exempt supply of financial services or a taxable supply of real property – whether appellant entitled to input tax credits for the purchase of ATMs – whether the ATMs “relate to” the other activities of the convenience stores

Miedzi Copper Corporation v The Queen 2015 TCC 26 – whether holding company entitled to claim input tax credits on the basis that they could “reasonably be regarded as having been… acquired… for consumption or use in relation to the shares or indebtedness” of its subsidiary – discussion of meaning of “related to”

Other

Supreme Court of Ireland – Ryanair Ltd v Revenue Commissioners [2017] IESC 19 – whether taxpayer entitled to claim input tax for professional fees incurred in making a bid to acquire the shares in a rival company – decision of High Court below no entitlement to deduction – Ryanair Ltd v. Revenue Commissioners[2013] IEHC 195 – found necessary to refer question of law to the European Court of Justice

GSTD 2003/3 – Austlii – Goods and services tax: are acquisitions made by a head company, or by a subsidiary member, in obtaining valuations in respect of forming or joining a consolidated group, made in carrying on the entity’s enterprise?

Commissioner of Taxation v American Express Wholesale Currency Services Pty Limited [2010] FCAFC 122 – whether AMEX entitled to partial input tax credits for acquisitions made based on the agreed formula under s 11-30(3) – use of formula as a proxy to determine extent of creditable purpose – whether, in applying the formula, the fee payments should be considered “revenue derived from input taxed supplies” and therefore be included in the numerator of the fraction – at [105]: typically, where a corporation makes both input taxed and non-input taxed supplies, acquisitions in the nature of general expenses and overhead will be only partly creditable. This is because such acquisitions have a real and substantial, though indirect, relationship to the corporation’s activities

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